Tarion Warranty on a New Home in Ontario: What Buyers Get

Buying a brand-new home comes with a warranty system that does not exist for resale homes. In Ontario, Tarion is the body that sets out the coverage for new homes, from your deposit before closing to defects after you move in.

This article explains the main parts: what is covered, for how long, the dollar limits and how claims work. Rules can depend on when you signed your agreement and Tarion has been under reform, so confirm the current details with your lawyer.

When the warranty starts and how long it lasts

Tarion warranties start on the date of possession, which is closing for a freehold home and interim occupancy for a condo. There are three layers of coverage:

Write the possession date on your calendar right away. Every deadline below is counted from it.

Coverage limits

The maximum statutory warranty coverage depends on when you signed your agreement. If it was signed on or after July 1, 2023, the limit is $400,000 for freehold homes and $300,000 for condo units. If it was signed from February 1, 2021 to before July 1, 2023, the limit is $300,000 for both.

These are maximums, not what you will necessarily receive. Whether a defect is covered, and how much is payable, depends on the facts and the warranty terms.

Deposit protection before you move in

Tarion also protects deposits. For freehold homes, protection is up to $60,000 when the price is $600,000 or less (agreements from January 1, 2018), or 10% of the price up to $100,000 when the price is over $600,000. Condo unit deposits are protected up to $20,000.

Registering the purchase agreement within 45 days gets the maximum cover. If you have just signed, ask your lawyer to confirm that registration is done.

Closing delays on a new build

Tarion also sets rules for delayed closings on freehold homes. Compensation is $150 per day for living expenses with no receipts, plus other receipted costs, capped at $7,500 in total. Less than 10 days' notice of a delay gives $1,500. You claim to the builder within 180 days and then to Tarion within the first year of possession, or 365 days after termination.

Closing-date changes generally need at least 90 days' written notice. If the home is not complete by the Outside Closing Date, 365 days after the Firm Closing Date, you have a 30-day termination period and get a full refund plus interest.

How to file a warranty claim

Warranty claims use forms with set timing: the Year-End Form in the last 30 days of year one, the Second-Year Form during year two, and the Major Structural Defect Form after year two and no later than year seven. Missing a window can put a claim at risk, so do not wait until the last day.

• Photograph and date each problem as soon as you see it.
• Keep emails and letters with the builder, and note when each was sent.
• List defects room by room so the forms are complete.
• Submit forms on time even if the builder says repairs are coming.

What to do next

• Note your agreement date, since coverage limits depend on it.
• Confirm with your lawyer that the purchase agreement was registered within 45 days.
• Record the possession date and set reminders for the one-year, two-year and seven-year deadlines.
• Do a careful walk-through and write down every deficiency before closing.
• Keep all builder documents and warranty paperwork in one folder.
• Check the current Tarion rules with your lawyer, as the system has been under reform.

Frequently asked questions